CITATION: T.S. Publishing Group Inc. v. Shokar, 2015 ONSC 3712
COURT FILE NO.: CV-10-408182
DATE: 20150616
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
T.S. PUBLISHING GROUP INC.
Plaintiff
– and –
TARWINDER SHOKAR, SHOKAR PUBLISHING GROUP INC. and HARBHAJAN SHOKAR
Defendants
TARWINDER SHOKAR
Plaintiff by Counterclaim
– and –
T.S. PUBLISHING GROUP INC., DANNY ROSSO and CHRISTIANE TETREAULT
Defendants by Counterclaim
Tanya C. Walker, for the Plaintiff and Defendants by Counterclaim
Tarwinder Shokar in person
J. MACDONALD, J.
REASONS FOR DECISION
[1] I delivered Reasons for Judgment following trial of this action and awarded the plaintiff damages against its former employee Tarwinder Shokar for his wrongdoing in Ontario while employed, and also following the termination of his employment. One aspect of the relief sought by the plaintiff was not addressed in my Reasons for Judgment. I directed further written submissions, in the following circumstances.
[2] The amended Statement of Claim sought a declaration that "the claim by the plaintiff arose out of misappropriation". This aspect of the relief was not addressed in oral argument. While I had the decision under reserve, I directed written argument on certain issues which also had not been addressed in oral argument. The plaintiff's written argument included the submission that, if damages should be awarded on a basis other than misappropriation, the plaintiff requests a declaration that Mr. Shokar's actions "constitute misappropriation for the purposes of s. 178(1) of the Bankruptcy and Insolvency Act[^1]" (the BIA). Mr. Shokar responded by stating that the plaintiff had not referred previously in this action to the BIA and to misappropriation surviving a bankruptcy. In delivering my Reasons for Judgment, I ruled that Mr. Shokar had not been heard on the application of s. 178(1) of the BIA to the facts of the case, and I ordered written argument in respect of that issue. The plaintiff's written argument raises s. 178(1)(d) of the BIA which states:
- (1) An order of discharge does not release the bankrupt from
(d) any debt or liability arising out of fraud, embezzlement, misappropriation or defalcation while acting in a fiduciary capacity or, in the Province of Quebec, as a trustee or administrator of the property of others.
[3] The amended Statement of Claim did not plead that Mr. Shokar was acting in a fiduciary capacity at any relevant time. At trial, no argument was addressed to this issue and I have made no finding that Mr. Shokar was acting in a fiduciary capacity. In the absence of such a finding, there is no legal basis for granting the declaration which is sought. That is because the concluding phrase of s. 178(1)(d), "...while acting in a fiduciary capacity", applies to all of the forms of wrongdoing set out therein. See 166404 Canada Inc. v. Coulter (1998) 1998 2010 (ON CA), 4 C.B.R. (4th) 1 (O.C.A.), leave to appeal refused (1998) 223 N.R. 395 (note) S.C.C., Canada Mortgage and Housing Corporation v. Gray (2014), 2014 ONCA 236, 119 O.R. (3d) 710 at para. 26 (C.A.).
[4] In its written submissions, the plaintiff also attempts to enlarge the scope of the declaratory relief beyond what it sought in the amended Statement of Claim. In my opinion, the plaintiff is not entitled to claim anything more other than what it has claimed in its amended Statement of Claim.
[5] The process which applies at trial is not the same as the process which would apply if Mr. Shokar were bankrupt and if the plaintiff were moving within the bankruptcy proceedings for a declaration that, if Mr. Shokar is discharged from bankruptcy, he is not released from liability to pay what the plaintiff has been awarded herein. For example, re McNabb 1996 10329 (AB KB), [1995] 5 W.W.R. 509 (Alta. Q.B.) states that, in such circumstances, the plaintiff as a creditor may then seek the benefit of s. 178(1)(d) and in doing so, may then allege and seek to prove that the bankrupt was acting in a fiduciary capacity even though that allegation was not made in the action which gave rise to the damages in issue.
[6] The claim for the declaratory relief pleaded in the amended Statement of Claim is dismissed. However, if Mr. Shokar becomes bankrupt, this dismissal is without prejudice to the plaintiff's right to seek a declaration that his discharge from bankruptcy does not release him from liability to pay to the plaintiff that which has been awarded to it in this action. I make no comment in respect of the costs awarded to the defendants by counterclaim against Mr. Shokar because that is distinct from the declaratory relief sought in the amended Statement of Claim.
Mr. Justice John Macdonald
Released: June 16, 2015
CITATION: T.S. Publishing Group Inc. v. Shokar, 2015 ONSC 3712
COURT FILE NO.: CV-10-408182
DATE: 20150616
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
T.S. PUBLISHING GROUP INC.
Plaintiff
– and –
TARWINDER SHOKAR, SHOKAR PUBLISHING GROUP INC. and HARBHAJAN SHOKAR
Defendants
TARWINDER SHOKAR
Plaintiff by Counterclaim
– and –
T.S. PUBLISHING GROUP INC., DANNY ROSSO and CHRISTIANE TETREAULT
Defendants by Counterclaim
REASONS FOR JUDGMENT
Mr. Justice John Macdonald
Released: June 16, 2015
[^1]: RSC 1985, c B-3